Economic slowdowns have often been followed by economic boom in the past. The collective push towards making lives better and pulling the economy back from the trenches results in a spurt of growth. The COVID pandemic is no different. Midway in to the pandemic , we are witnessing very early signs of recovery and growth. The Gulf region has however seen a slightly different trajectory of growth post-pandemic.
E-commerce in the Gulf Cooperation Countries (GCC) was limited and in the hands of a few powers. The sectors that they provided services in were also very limited. However, the double shock of the pandemic coupled with the oil price collapse tested the resilience and adaptation of their economies.
The epicentre of megatrends?
Experts in the GCC claim that the region has become the epicentre for some globally relevant megatrends. Demographic and social change, resource scarcity and climate change, urbanisation, rise of technology and the shift of power from the west to the global east have all been central to the middle-east. The region has played crucial role in contributing to these megatrends as well as speeding up the process in many cases, especially in being the medium of the power shift from west to the east.
Pandemic speeded up the ADAPT forces:
ADAPT that stands for Asymmetry, Disruption, Age, Polarisation and Trust, comprises the five forces confronting society and business that need immediate attention. These forces need to be controlled in any region for there to be growth and harmony. However, the pandemic further aggravated these forces by widening the asymmetric gulf between the rich and the poor, enabling the dominance of big companies, creating an unemployed generation of youth, polarising economies and inhibiting cooperation and fostering distrust that was fuelled by the discontent of the pandemic.
The motto was do or die:
The driving force for these economies, and the reason they survived was the simple motto of do or die. They turned the crisis into an opportunity and therefore, some of the finest innovations and ideas took root in the Gulf during the pandemic. A drive towards sustainability, digital transformation, rise of local small-scale and middle-scale enterprises and fiscal innovation have all been catalysts towards a post-pandemic boom. The governments also showed great initiative by putting $122 billion into the market as incentive to the pandemic and oil crisis rid economy.
The Gulf has been on a path of recovery and growth post-pandemic. The non-oil GDP of the region has taken over a major share of the overall GDP, lessening the dependency on oil. Private sector development that has been the prime focus of these countries has seen success bringing in sizable benefits. The annual growth has been anticipated to be between 3%-6% by the world bank.
While it may be difficult to fully comprehend the post-pandemic business landscape of the Gulf, early signs of growth and recovery show a promise for the coming years.